TTF Blog: 25 January 2021

Will a new inquiry bolster campaigns to address Economic Crime in the UK?

Houses of Parliament, pic by Tristan Surtel

by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting

After Treasury Secretary John Glen appeared to stonewall justice for Equitable Life victims, and ‘parliamentary arithmetic’ stalled MPs attempts to get tough new measures on economic crime into law,  the Treasury Committee will hear from its first expert witnesses on Economic Crime today. Will this resolve the UK’s malaise?
Corporate Crime fudge

As researchers at NGO Spotlight on Corruption have pointed out, back in 2015, the Conservative Party manifesto stated that it would make it a crime for companies to fail to put in place measures to stop economic crime. Six years on, and the government’s Law Commission is projected to be reviewing this topic all year. Last autumn, secret documents leaked to journalists implied that there are severe consequences to dropping the ball: in one secret intelligence assessment, analysts from the US Financial Crimes Enforcement Network ‘described the U.K. as a “higher risk” country for money laundering, on a par with Cyprus’.

Scandals of inequity

Bob Blackman MP chairs the All Party Parliamentary Group on Pension Scams, which TTF set up and helps to run. He spearheaded a debate last week on the decades-long Equitable Life scandal, which I covered on this blog last week. In Blackman’s view, the Equitable Life case is ‘absolutely unique ‘: “Back in the 1980s, Equitable Life started what can only be described as a Ponzi scheme. I distance the current Equitable Life board from what was going on in the 1980s, but the company then deliberately set out to create a scheme whereby it promised bonuses that could not be achieved and could not be sustained in the long term.”

He went on to explain, introducing a full Parliamentary debate on the scandal, there had been “a conspiracy between Equitable Life, the regulator and the Government of the day. Equitable Life was considered too big to fail because if it did, the Government would have had to pick up the costs. The scandal went on, and the House of Lords was involved in setting aside the position way back in 1999, as a result of which Equitable Life closed to new business in 2000.”

Treasury called to task on transparency

The Treasury, meanwhile, was accused by MPs of failing to be transparent to Equitable Life victims, on the knotted issue of how compensation payments were calculated. The total loss from Equitable Life’s collapse was estimated at more than £4bn, victims’ campaigners report they have received on average only 22% of what they lost, and that some have died without receiving justice.

Alistair Carmichael MP also contributed to last week’s debate, pointing out that the problems experienced by Equitable Life victims indicate the wider issue of enforcement and restitution against financial crime.

Fraud victims forced to raise money for lawyers

Carmichael explained: “Over the last few years, I have been working with constituents and other people throughout north-east Scotland who have lost money as a result of the fraud of Alistair Greig, director of Midas Financial Solutions in Scotland. He was eventually jailed for 14 years by the High Court in Scotland for running a Ponzi scheme. The financial services compensation scheme has started paying out compensation to the victims of that fraud, but let us just say that it did not do so willingly. My constituents and many others have had to put together and invest more than £2 million in legal fees to get the FSCS to the point where it was prepared to pay out.”

Does history repeat itself? The Financial Services Compensation Scheme is currently facing a judicial review from victims of the London Capital and Finance scandal, in which – for many of the victims – mini-bonds were misleadingly marketed as ISA-qualifying investments. The scheme collapsed and they lost their savings.

Last week James McClelland QC told the court by remote hearing “It seems they [LCF] were willing to contract with anyone including people on social security benefits & with very limited means.” Some “had to sell their homes, one faces the threat of homelessness, one refers to cutting back on meals” – it is an horrific case.

TTF gives evidence on ‘Push Payment Fraud’ to Economic Crime probe

“The 62 individuals whose cases are on my desk have lost an average of over £60,000 each, totalling over £4M” explains fraud investigator Richard Emery, in written evidence to MPs’ Economic Crime inquiry for TTF.  More widely, during the six years 2014 – 2019 there were an estimated 300,000 cases of authorised push payment fraud (in which bank transfers are made to fraudsters, often by them using deceit or impersonation) with losses totalling c.£1.3bn, according to lobbyists at UK Finance.

Emery is highly critical of banks’ speed of action against push payment fraud, and how slowly some victims are served – stolen funds are often rapidly dissipated. “Where beneficiary banks freeze funds in an account that is being used for fraud there is a process by which these funds can be repatriated to the victim” he explains, “this process can be infuriatingly slow and in one recent case it was nearly six months before the victim’s bank was able to confirm that they had not been able to recover any of the stolen funds.”

APPG on Fairer Finance speaks up
You can find out more about tackling push payment fraud and other financial crimes at a symposium TTF is running this evening. Richard Emery is one of the speakers, another is Peter Gibson MP, chair of the All Party Parliamentary Group on Personal Banking and Fairer Finance, which Transparency Task Force set up.

HSBC chiefs to be grilled on Hong Kong campaigners' frozen bank accounts

The HSBC Centre in Hong Kong

Two bronze lion sculptures have stood outside HSBC’s head office in Hong Kong since 1935, projecting courage and strength, but their rictus grins are beginning to look bitterly ironic. The bank has been drawn within the ambit of China’s National Security Law, which provoked mass unrest in Hong Kong in the last two years. Among many critical aspects, the new law sets up an Office for Safeguarding National Security that can – according to the BBC – operate with impunity. It “would not have to abide by Hong Kong’s laws.”.

This has escalated now into a potential diplomatic row, as former Hong Kong lawmaker Ted Hui has says that he has given evidence of frozen HSBC accounts to British MPs. Hui faces a variety of charges connected with social unrest in Hong Kong, and previously urged Britain to impose sanctions on HSBC after it reportedly froze the credit cards and savings accounts belonging to him and his family.

Tomorrow, MPs on Parliament’s Foreign Affairs Committee will probe HSBC’s CEO Noel Quinn and chief compliance officer Colin Bell .

Quinn previously said in a letter to Hui that the bank had “no choice” but to freeze accounts belonging to him and his family at the behest of Hong Kong police.  Hui dismissed this response as ‘irresponsible’. You can watch Quinn and Bell being scrutinised by MPs tomorrow on Parliament TV.

FCA reports on ~£20.1bn transferred from Defined Benefit pension schemes

City regulator the FCA recently released a new tranch of its data on clients being advised to transfer out of Defined Benefit pension schemes, showing that approximately 49,456 clients were provided with a personal recommendation to transfer or convert their pension between October 2018 and March 2020. This amount has a total value of more than £20bn, vs approximately £10.2bn in recommendations ‘not to transfer’.

It may indicate a bit of a curve down from a boom. 2015’s Pension Freedom reforms prompted a big surge in DB transfers – from just a few thousand  pension savers in the summer of 2015, to more than 70,000 people advised to transfer out of DB schemes in 2018.

Signs of movement for British steelworkers

Sadly, the boom prompted by Pension Freedoms masked some devastating scams, such as the ones suffered by British steelworkers who often lost all of their pension savings. MoneyMarketing reports that at least 13 firms connected to the British Steel pension scheme that have collapsed to date.

MPs last week called on the FCA’s chief executive, Nikhil  Rathi, to speed up justice to British Steelworkers. The FCA has now written to clients of collapsed British Steel advice firm Bartholomew Hawkins, urging them to check if they have a claim for unsuitable advice against the firm.

Scams Inquiry to hear from Pensions Minister

The Work and Pensions Select Committee’s damning findings on the British Steel scandal drove a lot of support for a broader Pension Scams Inquiry that we at Transparency Task Force campaigned for, and was launched last year. This has now heard blistering evidence from scam victims, from TTF’s founder Andy Agathangelou and from TTF members including full papers on scam prevention and flaws in the UK’s system of watchdogs.

The Pension Scams inquiry continues this week. This Wednesday Guy Opperman, the UK’s Minister for Pensions and Financial Inclusion, will appear to give evidence.

Press Timeline of relevant articles:

25 Jan 2021FCA urges clients of collapsed British Steel firm to consider claims by Sonia Rach for MoneyMarketing

22 Jan 2021HSBC chiefs to face MPs’ questions over Hong Kong protesters’ frozen accounts by Poppy Wood for City AM

21 Jan 2021MPs call on FCA to ‘hold bad advisers to account’ by Laura Purkess for CityWire

21 Jan 2021FCA told it lacks vision to tackle consumer issues by Amy Austin for FT Adviser

20 Jan 2021 Mortgage Prisoner amendments blocked by Treasury, by Suleman Baig for Quadrin Group

18 Jan 2021Former Hong Kong lawmaker rejects HSBC’s explanation over frozen accounts by Reuters

18 Jan 2021British Virgin Islands’ governor launches inquiry into alleged corruption by Patrick Wintour for the Guardian

18 Jan 2021What we learned from a bumper FCA data dump by Justin Cash for MoneyMarketing

18 Jan 2021Wall Street fears bubble from Biden stimulus as retail investing booms by Katherine Greifeld, Claire Ballentine and Vildana Hajric for

17 Jan 2021Bobby Kennedy was right: GDP is a poor measure of a nation’s health by Larry Elliott for the Guardian

15 Jan 2021 –  Mortgage prisoners accuse Treasury of working against them as wider FCA remit blocked by Owain Thomas for Mortgage Solutions

14 Jan 2021MP Vows To Keep Pushing Tougher Economic Crime Law by Richard Crump for Law360

13 Jan 2021Mortgage prisoner finance bill amendments struck down by Gary Adams for Mortgage Strategy

12 Jan  2021 – Hong Kong families with money trapped in closed law firm’s frozen bank accounts turn to government for low-interest loans by for South China Morning Post

12 Jan 2021 – Bitcoin: be prepared to lose all your money, FCA warns consumers by Kalyeena Makortoff  for the Guardian

11 Jan 2021Insolvency firms put under investigation after scandals, by Louisa Clarence-Smith for the Times

07 Jan 2021 Regulators and police say Covid lockdowns have driven up online pension scams and demand regulation of Google, Facebook and others by Jim Armitage for the Evening Standard

06 Jan 2021 Why UK savers could fall through the cracks in Brexit regulation from the FCA by Jim Armitage for the Evening Standard

04 Jan 2021Bank of England fails to publish officials’ expenses by Alex Ralph for the Times

03 Jan 2021Five years on and still no answers over HBOS affair by Jill Treanor and Liam Kelly for Sunday Times

31 Dec 2020So, when WILL we learn truth about bank chiefs? Another year and still no sign of key HBOS probe by Lucy White for the Mail

24 Dec 2020ASIC drops investigation into Westpac, by Investor Daily in Australia

21 Dec 2020Financial Conduct Authority fines just ten wrongdoers this year by Patrick Hosking in the Times

19 Dec 2020 Andrew Bailey could return to face MPs after damning report on London Capital & Finance scandal by Ben Martin & Patrick Hosking for the Times

18 Dec 2020Google urged to vet online financial promotions better by Huw Jones for Reuters

18 Dec 2020Financial Conduct Authority insiders warned of London Capital & Finance-style minibonds in 2013 but nothing was done by Jim Armitage for the Evening Standard

18 Dec 2020Blue Gate escapes $13.5 million Connaught fund fine from FCA by Huw Jones for Reuters

18 Dec 2020Executives at Financial Conduct Authority to lose bonuses over London Capital & Finance scandal by Ben Martin for the Times – Bosses at the Financial Conduct Authority will lose £205,000 in bonuses after the highly critical report on the regulator’s handling of the London Capital & Finance scandal

17 Dec 2020The fallout from the financial regulator’s shocking failure on LC&F is not over yet by Nils Pratley for the Guardian

17 Dec 2020FCA did not ‘effectively supervise’ collapsed mini-bond issuer LCF, says report by Matthew Vincent for the Financial Times  “Members of the Transparency Task Force, a lobby group pushing for regulatory reform, pointed out that in his own representations to the Gloster review, Mr Bailey included a demand “to delete references to ‘responsibility’ resting with specific identified/identifiable individuals”.

17 Dec 2020Former Financial Conduct Authority boss Bailey apologises over handling of mini-bond scandal by Ben Martin for the Times

16 Dec 2020EU cannot be ‘captured’ by City of London, warns financial services chief by Sam Fleming and Jim Brunsden for the Financial Times

16 Dec 2020Treasurer plots ASIC shakeout by John Kehoe for Financial Review

15 Dec 2020How to remake Australia’s lame corporate watchdog by Pamela Hanrahan for Financial Review

08 Dec 2020MPs call for £2.6bn Equitable Life compensation by Adam Williams for the Telegraph

03 Dec 2020HMRC ‘treat the victims of pension scams like criminals’: Taxman has benefited from the ‘proceeds of crime’ MPs are told by Tom Kelly for Daily Mail

25 Nov 2020FSCS seeks extra £92m in interim levy by Daniela Esnerova for MoneyMarketing

25 Nov 2020  – Trump Administration Targets Banks Divesting From Fossil Fuels In New Anti-Climate Rule by Sharon Kelly for DeSmogBlog

23 Nov 2020Bank of England policymaker warns of ‘pandemic hangovers’, as private sector shrinks – as it happened by Graeme Wearden for the Guardian

16 Nov 2020 – Bank of England ‘failing’ on climate change reform by Philip Aldrick for the Times

16 Nov 2020 – Fed moves closer to joining global peers in climate-change fight by Ann Saphir for Reuters

14 Nov 2020Fraudsters will exploit Covid vaccine to con vulnerable, warns National Crime Agency by Charles Hymas for Telegraph

09 Nov 2020Ombudsman inundated with complaints about loans by Katherine Griffiths for the Times

09 Nov 2020Spike in personal pension cases at ombudsman by Rachel Mortimer for FT Adviser

09 Nov 2020 – Regulator: Climate risk ‘looms even larger’ than pandemic by Avery Ellfeldt for ClimateWire (U.S.)

08 Nov 2020How financial services watchdog has reacted to UK consumer worries in Covid by Hilary Osborne for Guardian

08 Nov 2020Five predictions for banking regulation in a Biden presidency by Jon Hill for Law 360

05 Nov 2020Martin Lewis warns of ‘epidemic of scams’ after ICU nurse loses £8,000 by Scott Edwards for Wales Online

05 Nov 2020FCA bans adviser trio jailed for sex offences by Rachel Mortimer for FT Adviser

03 Nov 2020 – ‘We haven’t received a penny’: Business interruption insurance row intensifies as owners fear payout delays, by Elizabeth Anderson for iNews

03 Nov 2020Aviva’s shares fiasco highlights weakness of the city watchdog by Patrick Hosking for the Times

02 Nov 2020Banks have done little to help the country through the pandemic, so why is the government rewarding them? by Simon Youel for the Independent

29 Oct 2020 – Calls to sack Malta financial regulator CEO by Cristian Angeloni for International Adviser

27 Oct 2020U.S. group urges Biden to use financial regulation to control climate change by Valerie Volcovici for Reuters

27 Oct 2020 ‘Impact startups’ continue to raise funding during the pandemic despite difficulties faced by the wider tech startup sector by Sebastian Klovig Skelton for Computer Weekly

26 Oct 2020 – Why there must be thorough probe of claims made by Bank Signature Forgery Campaign – Greg Wright  for the Yorkshire Post

26 Oct 2020 –  Critics demand action over ‘flawed’ British Banking Resolution Service by James Hurley for the Times

24 Oct 2020Banks look to debt collectors to recover bounce back loans by Nicholas Megaw, Stephen Morris and Daniel Thomas for the FT

23 Oct 2020Bank Signature Forgery (film) by Nicholas Wilson for Corruption UK

22 Oct 2020 – UK fraud agency suffers string of senior departures by Kate Beioley for the FT

22 Oct 2020 HSBC froze £1.5bn of customers’ cash in ‘dormant accounts’ – report by Kalyeena Makortoff & Juliette Garside for the Guardian

22 Oct 2020Work harder to find fraud, watchdog tells auditors by James Hurley for the Times

17 Oct 2020 – MPs pursue claims bank signatures were faked on court papers by Rupert Jones for the Guardian

16 Oct 2020 We need universal digital ad transparency now by Laura Edelson, Erika Franklin Fowler and Jason Chuang for TechCrunch

15 Oct 2020 – Rising COVID-19 Rates Send NatWest Misselling Trial To Video by Bonnie Eslinger for Law 360

15 Oct 2020 – MPs Push Agencies to Act on Forged Signature Claims by Law360

13 Oct 2020 –  Mark Carney says banks should link executive pay to Paris climate goals by Kalyeena Makortoff for the Guardian

12 Oct 2020 ‘It is time to reboot the competition regime for the modern, digital age’ by David Wighton, The Times

12 Oct 2020 Gina Miller blasts FCA complaints scheme changes ‘unfair, immoral and illegal’ by Cristian Angeloni for Portfolio Adviser

12 Oct 2020MPs call for input on Pension Schemes Bill by James Phillips for Professional Pensions

10 Oct 2020 Give pension trustees power to fight scammers, say MPs by Kenza Bryan for the Times

08 Oct 2020  – Freedom to transfer pensions should be stripped where scams are suspected, industry experts urge by Jessica Beard for the Telegraph

08 Oct 2020 – Planned pensions shake-up passes first Commons hurdle by Law 360

08 Oct 2020 – WPC chairman says transfer rules ‘must be changed’ by Amy Austin for FT Adviser

07 Oct 2020 – Tech giants share blame for pension scams, MPs told by Law 360

06 Oct 2020 – FCA opens 85 cases over pension scam concerns by Amy Austin for FT Adviser

03 Oct 2020 – Record number of savers fall victim to investment fraud as scam adverts stay on Google by Andrew Ellson for The Times

02 Oct 2020A New Theory of Soil by Alex Varley-Winter for SustainAct

28 Sep 2020 – PM urged to show leadership in fight against scams by Amy Austin for FT Adviser
28 Sep 2020The 100 Whistleblowers who changed Wall Street by Stephen M. Kohn and Mary Jane Wilmoth for National Law Review
28 Sep 2020TTF calls for govt leadership on pension scams following meeting with PM by Sophie Smith for Pensions Age
26 Sep 2020 – £60m revamp for Action Fraud hotline that failed victims by Martin Beckford for The Sunday Times
25 Sep 2020 – FCA labels Google’s scam advert efforts ‘deeply frustrating’ by Rachel Mortimer for FT Adviser
23 Sep 2020 – Bank Forgery Campaign (video) by Andy Verity for BBC
20 Sep 2020 – Explore the FinCEN Files Data and Suspicious activity reports, explained by the International Consortium of Investigative Journalists (ICIJ); Fergus Shiel and Ben Hallman
21 Sep 2020 Flood of complaints expected over Covid-19 UK business loans, by Kalyeena Makortoff for the Guardian
16 Sep 2020 – Regulators Accused of Ignoring Scam Warnings by Jack Gray for Pensions Age
16 Sep 2020Tougher clampdown on pension scams is needed, MPs told by Vicky Shaw for Belfast Telegraph
11 Sep 2020 – ‘Delay changes to Watchdog Complaints Scheme’ by James Hurley for The Times
03 Sep 2020Regulators have not yet got to grips with how to close down crooks, warns TTF  by Hope William-Smith for Professional Pensions

24 Aug 2020Financial Conduct Authority rushes to minimise compensation for its failings by James Hurley for The Times

04 Aug 2020Have your say: Will the WPC’s inquiry into the impact of pension freedoms be too overshadowed by Covid-19 impacts? by Professional Pensions

03 Aug 2020 – ‘“I’m 39, have lost my job and am in debt – can I unlock my £18k pension?” … DON’T do it!’‘ by Steve Webb for This is Money

01 Aug 2020‘I lost £2.3m after I was conned into transferring my pension’ by Jessica Beard for the Telegraph

31 Jul 2020 ‘Common sense’ prevails as pension freedom withdrawals fall 17% — But drop is expected to be ‘a short-term blip’ by Robbie Lawther for International Adviser

31 Jul 2020HMRC figures show plunging pension freedom withdrawals by Hope William-Smith for Professional Adviser

28 Jul 2020MPs launch inquiry into pension scams  by Tom Kelly for Daily MailUK Pension Scams Under Scrutiny After 2015 Relaxation in Rules by Reuters & MPs launch wide-ranging pension scams probe by Justin Cash for MoneyMarketing

24 Jul 2020 – US business groups seek steps to stamp out online fraud by Leonie Barrie for Just Style

22 Jul 2020Pension scams increase amid lockdown by Sophie Smith for Pensions Age & Missed Opportunity to Use Victims in Scam Work by Amy Austin for FT Adviser

21 Jul 2020  Londongrad Calling: Is Europe’s Laundromat the ‘New Normal’? by Mark Conrad

20 Jul 2020 Campaigners Aim to Create Pension Scam Database by Michael Klimes & Government eyes unauthorised firms by Justin Cash for MoneyMarketing

17 Jul 2020 – Year ‘dominated’ by FCA shortcomings as 205 complaints made,  by Rachel Mortimer for FT Adviser

29 Jun 2020 – MPs Pushed to Launch Pension Scam Inquiry by Amy Austin for FT Adviser & Lawmakers Urged To Open Inquiry Into Pension Scams by Martin Croucher for Law 360

14 May 2020 – Under Rising Pressure on Climate, JP Morgan Rejects Shareholders’ Calls to Disclose Carbon Footprint by Alex Varley-WInter for DeSmog

11 May 2020 – FCA urged to build public trust in independent reviews by Rachel Mortimer for FT Adviser

30 Apr 2020 – FCA was warned three years ago about mini-bond firm Blackmore Bond, which collapsed with £45m of savers’ money by Ben Chapman for the Independent

15 Apr 2020 – Met police lose two thirds of finance officers as fraud soars by Ben Ellery for the Times

25 Mar 2020 – Care Home Wants NatWest Docs in Misselling Fight by Law360

20 Mar 2020 – Connaught review delayed as Covid-19 concerns loom by Rachel Mortimer in FT Adviser

07 Jan 2020It’s time to keep your pensions promise, Boris! The PM pledged to help these victims of a huge scam FOUR years ago – and they’re still waiting by Tom Kelly for the Daily Mail.

29 Dec 2019‘Lambs to the slaughter – tens of thousands of savers have lost up to £10billion in rogue pensions schemes sanctioned by the government… and now the taxman is threatening VICTIMS with fines’, and ‘Making millions from other people’s misery’: A Government adviser, call centre chief and pension scheme director are among those who stand accused of involvement in pension schemes that exploited loophole in the law by Tom Kelly for the Daily Mail

15 Aug 2019Victims hit by Connaught’s collapse blast City watchdog for ‘whitewashing’ independent review by Lucy White for Daily Mail

05 Aug 2019Plunder in paradise: The ‘adviser’ behind a Costa scam that has cost expat pensioners £25MILLION – and led one to attempt suicide by Laura Shannon for Mail on Sunday

05 Jul 2019 Government-owned bank ‘forging signatures’ in repossession cases by Andy Verity for BBC

18 Jun 2019“I came home to find my house had been stolen!” by Angela Ellis-Jones for the Daily Mail

20 Jun 2019 – FCA orders review of its handling of Connaught collapse by Rachel Mortimer for FT Adviser

13 Jun 2019 – Investigation into disgraced RBS small business unit branded a ‘whitewash’ by MPs by Ben Chapman for the Independent

29 Mar 2019MPs call for inquiry into alleged forgery of signatures by Andy Verity for BBC

15 Feb 2017 – RBS accused of fraud & forgery by customers and ex-employee by Andrew Hosken for The World Tonight BBC Radio 4

22 Dec 2016Solicitors suspended for roles in collapsed Brazilian investment scheme by Nick Hilborne for Legal Futures

23 Sep 2016Which? makes scams super-complaint by Adam French for Which?

08 Aug 2016The Latest Bank Interest Rate Scandal Signals A Crisis Of Australian Democracy by Professor Carl Rhodes for New Matilda

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